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In conclusion, you really want to set realistic goals and start doing any of these methods in order to achieve those goals. How to Generate Passive Income Sources Being able to generate passive income from different sources is one of the strategies that everyone wishes to employ. It may take some time before you are able to generate a significant amount of cash inflow, but you have to carry on with an upward thrust and steady momentum. Generating passive income is especially great if you are aiming for extreme early retirement because the perfect time to begin creating passive income is when you are still in your mid 20’s to early 30’s or anytime in your life where you are not burdened with financial problems and obligations. The idea behind creating passive income is to start with what you (hopefully) have with you, which is your savings. You can only begin to tweak your finances if you have something to work with.
On a similar note, you can also take a look at real estate investment trusts (REITS) which make for a terrific source of passive income. People tend to forget that the money they earn from the different sources of passive income should be placed elsewhere for further investments or savings. It is vital not to withdraw any money from your passive income. The more you make that money difficult for you to reach or withdraw from, the better. Having passive income does not necessarily mean you can just sit around at a tropical beach sipping on cold beverages, and while you can opt to do that if you are in desperate need for a treat, you should be giving your cash inflow some attention and work, if any is needed. Getting started with earning passive income does not always require you to go on a head-on collision with financial jargons and standardized systems.
The cheap life you are trying to avoid will still get back at you in the form of debt, long hours at work, stress, and the probability that you might still be working past the age of 65. There is another method which you can live with and it is through generating passive income. Throughout the next pages, you will be learning more about passive income but the basic idea is to couple your active income with various sources of passive income. Two of the most common sources that early retirees can live with are dividend-yielding stocks and rental properties. However, every source of passive income requires an investment and nearly all kinds of investments involve risk. It is important for you to calculate your risk tolerances and consider safer options so you do not end up burning your savings. 5 Reasons You Should Consider Extreme Early Retirement You Will Have More Time Enjoying the Goodness in Life The average age when people retire is 65 or 70, and if you think about it, people spend more time working instead of living.
8-hour work day, Albert Einstein, barriers to entry, Bernie Madoff, butterfly effect, buy low sell high, California gold rush, Donald Trump, financial independence, high net worth, intangible asset, Mark Zuckerberg, negative equity, passive income, payday loans, self-driving car, Snapchat, Stephen Hawking, Steve Jobs, Tony Hsieh, Y2K
If you are not taking the greatest care of your most valuable asset, you can have all the money you want in the bank, but your worth will never reach its full potential. So step one of your plan is invest in appreciable assets, starting with the first and most important one…you! Passive Income Generation The most obvious source of passive income when you are building a property portfolio is your rental income. That is half the purpose (after the capital gains from appreciation) of owning investment property. But there are more ways to create passive income. You could start a business. If you are not ready for that step yet, you could look at trading the money markets. In Goals to Gold: Trading the Football Pitch for the Financial Markets, ex-footballer Lee Sandford shows us how he created a healthy passive income when his football career ended by learning to trade the financial markets. We love to criticize the huge salaries of footballers, but we forget that their careers are fleeting.
I opened the book on the tube on the way home and didn't put it down for two days. I was gripped. It was my first introduction to the concept of passive income, and I became obsessed with it. Darren and I could not stop talking about how we were going to achieve our new goals of creating a passive income source that would allow us to keep building our wealth indefinitely. I could hardly believe that so much financial security and freedom was available to me and I became 100 percent focused on working out how I could make it happen. During the months that followed, all Darren and I did was research the topic. We attended countless seminars and trawled the Internet looking for new strategies for building passive income. Of course the one that consistently stood out was earning a rental income from a property portfolio, so we concentrated our efforts on learning everything we could about property investment.
People risk their money investing in technology, spending huge sums on research and development, and going through successes and failures, so that we can enjoy new innovations such as smartphones and (coming sooner than you think) self-driving cars. In Without Risk There's No Reward, Bob Mayer tells many anecdotes to show how his booming property business could not have been built without taking huge risks. Step two of your plan should be to create a passive income from rental income and through trading the money markets, with a possible long-term view to creating a passive income from a business. Business Creation and Brand Building Does building a business sound like hard work? It is. But it is a highly effective way of creating passive income, as well as building a potentially appreciable asset. Remember that assets can be tangible or intangible. A brand is an intangible asset. Coca-Cola's huge worth is based on its brand, not the actual value of the contents of its products. Knowledge is an intangible asset.
J.K. Lasser's Your Income Tax by J K Lasser Institute
Affordable Care Act / Obamacare, airline deregulation, asset allocation, collective bargaining, distributed generation, employer provided health coverage, estate planning, Home mortgage interest deduction, intangible asset, medical malpractice, medical residency, money market fund, mortgage debt, mortgage tax deduction, passive income, Ponzi scheme, profit motive, rent control, Right to Buy, telemarketer, transaction costs, urban renewal, zero-coupon bond
Hillman’s plight is lamentable, but as the Fourth Circuit ruled, relief can only come from Congress if the IRS does not liberalize its regulation on self-charged expenses. 10.9 Passive Income Recharacterized as Nonpassive Income There is an advantage in treating income as passive income when you have passive losses that may offset the income. However, the law may prevent you from treating certain income as passive income. The conversion of passive income to nonpassive income is technically called “recharacterization.” This may occur when you do not materially participate in the business activity, but are sufficiently active for the IRS to consider your participation as significant. Recharacterization may also occur when you rent property to a business in which you materially participate, rent nondepreciable property, or sell development rental property. - - - - - - - - - - Caution “Recharacterization” of Passive Income Gain on the sale of property used in a passive activity may be recharacterized as nonpassive income if the property was formerly used in a nonpassive activity (10.16)
She does not materially participate in any of the activities during the year but participates in Activity A for 105 hours, in Activity B for 160 hours, and in Activity C for 125 hours. Her net passive income or loss from the three activities is: Carol’s passive activity gross income from significant participation passive activities of $2,200 exceeds passive activity deductions of $1,500. A ratable portion of her gross income from significant participation activities with net passive income for the tax year (Activities A and C) is treated as gross income that is not from a passive activity. The ratable portion is figured by dividing: 1. The excess of her passive activity gross income from significant participation over passive activity deductions from such activities (here $700) by 2. The net passive income of only the significant participation passive activities having net passive income (here $1,000). The ratable portion is 70%. Thus, $280 of gross income from Activity A ($400 × 70%) and $420 of gross income from Activity C ($600 × 70%) is treated as nonpassive gross income.
Losses disallowed by the passive activity rules are suspended and carried forward to later taxable years and become deductible only when passive income is realized or substantially all of the activity is sold. Casualty and theft losses are not passive losses unless they are of the type usually occurring in a business, such as shoplifting theft losses. On your tax return, passive income items and allowable deductible items are reported as regular income and deductions. For example, rental income and allowable deductions are reported on Schedule E. However, before you make these entries, you may have to prepare Form 8582, which identifies your passive income and losses and helps you to determine whether passive loss items are deductible. At-risk rules generally limit losses for an activity to your cash investment and loans for which you are personally liable, as well as certain nonrecourse financing for real estate investments.
The Website Investor The Guide to Buying an Online Website Business for Passive Income Jeff Hunt NEW YORK The Website Investor The Guide to Buying an Online Website Business for Passive Income © 2015 Jeff Hunt. All rights reserved. No portion of this book may be reproduced, stored in a retrieval system, or transmitted in any form or by any means—electronic, mechanical, photocopy, recording, scanning, or other,—except for brief quotations in critical reviews or articles, without the prior written permission of the publisher. Published in New York, New York, by Morgan James Publishing. Morgan James and The Entrepreneurial Publisher are trademarks of Morgan James, LLC. www.MorganJamesPublishing.com The Morgan James Speakers Group can bring authors to your live event. For more information or to book an event visit The Morgan James Speakers Group at www.TheMorganJamesSpeakersGroup.com.
But also, like other kinds of business investments, if you are willing to put a little bit of effort in along with your money, you can make a little more. And, if you are willing to put in a lot of effort, you can make a lot of money. “Anyone who is not investing now is missing a tremendous opportunity.” —Carlos Slim Is Website Investing Truly Passive? As I said, one reason I love website investments is because there is the potential to have a passive income stream. There are some kinds of websites, like the healthcare website I mentioned, that are content websites. You put good information on the pages, and people visit to read the information. You make money when the visitors click on ads or when the advertisers pay you. Other websites require more activity on your part. For example, eCommerce websites require you to buy products and ship them when customers order from you.
Google might keep $0.50 and pass along $1 to the website owner. In the per-impression model, a company might pay $10 for every thousand times its ad is displayed on a website. Google might keep $4 of that and pass $6 along to the website owner. In effect, Google and other sophisticated ad networks have made it extremely easy for website owners to earn money from their content websites. Content websites produce very passive income streams, provided there is a steady stream of traffic. I own content websites that get a steady stream of visitors from articles I published long ago on sites that I have not updated in years. However, traffic is a fickle beast, and as many stories as there are about steady, long-term traffic, there are just as many about traffic that was there one day and dried up the next. More about traffic later, but for the purposes of our advertising discussion, be aware that if you are buying a website that earns its money from advertising, consistent traffic will either make or break your profitability.
How to Form Your Own California Corporation by Anthony Mancuso
It’s usually easy to avoid by having a tax adviser tell you how to use a corporate services contract that won’t be classified as a personal services contract, and because most small corporations do not have significant passive income. Also, the PHC rules state that rental income and software royalties—two of the categories of passive income most likely to be earned by small corporations—won’t be counted to determine if a corporation is a PHC. Even if the IRS finds that a corporation is a PHC and assesses the surtax, the corporation can usually avoid the tax by making dividend payments (direct payments out of current earnings) and profits to shareholders. In other words, you can pay your profits to your shareholders, not to the IRS in the form of a PHC tax. The PHC rules are too complicated to fully explain. If your corporation has five or fewer shareholders and performs services or earns passive income, check with a tax advisor to make sure you avoid the PHC surtax.
Apple II, bounce rate, Byte Shop, Cal Newport, capital controls, cleantech, Community Supported Agriculture, deliberate practice, financial independence, follow your passion, Frank Gehry, information asymmetry, job satisfaction, job-hopping, knowledge worker, Mason jar, medical residency, new economy, passive income, Paul Terrell, popular electronics, renewable energy credits, Results Only Work Environment, Richard Bolles, Richard Feynman, Richard Feynman, rolodex, Sand Hill Road, side project, Silicon Valley, Skype, Steve Jobs, Steve Wozniak, web application, winner-take-all economy
Remember Jane from earlier in Rule #3: She dropped out of college with the vague idea that some sort of online business would support a lifestyle of adventure. If she had met Derek Sivers, she would have delayed this move until she had real evidence that she could make money online. In this case, the law would have served its purpose well, as a simple experiment would have likely revealed that passive-income websites are more myth than reality, and thus prevented her rash abandonment of her education. This doesn’t mean that Jane would have had to resign herself to a life of boring work. On the contrary, the law could have provided her structure to keep exploring variations on her adventurous life vision until she could find one to pursue that would actually yield results. Summary of Rule #3 Rules #1 and #2 laid the foundation for my new thinking on how people end up loving what they do.
During my quest, for example, I discovered two traps that typically trip people up in their search for control. The first trap was having too little career capital. If you go after more control in your working life without a rare and valuable skill to offer in return, you’re likely pursuing a mirage. This was the trap tripped, for example, by the many fans of lifestyle design, who left their traditional jobs to try to make a living on passive income-generating websites. Many of these contrarians quickly discovered that the income-generating piece of that plan doesn’t work well if you don’t have something valuable to offer in exchange for people’s money. This trap might not seem relevant to my job hunt, as the academic-search process usually demands large stores of career capital—in the form of peer-reviewed publications and strong recommendation letters—before a candidate has a possibility of earning an offer.
Early Retirement Guide: 40 is the new 65 by Manish Thakur
A different way to handle the risk of a bad economy is to have more saved up in your investment egg than the 25x suggested amount that most people go with. It's still good to adjust your withdrawal rate a little but it won't have to be a significantly smaller nest egg. The third option to fight this risk is to diversify your income streams. Instead of just investing in stocks and bonds, you could also own a rental property, create passive income streams, and develop skills that you can use to quickly use to make money in a pinch, such as developing websites for small businesses. What if I lose my job and can't find work? The good news is that being unemployed isn't as bad as people make it out to be. It's a rare opportunity to reflect, search for a job that better fits our goals, and of course spend more time with our loved ones.
Early Retirement Extreme by Jacob Lund Fisker
8-hour work day, active transport: walking or cycling, barriers to entry, clean water, Community Supported Agriculture, delayed gratification, discounted cash flows, diversification, don't be evil, dumpster diving, financial independence, game design, index fund, invention of the steam engine, inventory management, loose coupling, market bubble, McMansion, passive income, peak oil, place-making, Ponzi scheme, psychological pricing, the scientific method, time value of money, transaction costs, wage slave, working poor
In addition, financial skills are important. In particular, they become increasingly important for anyone who accumulates more and more assets. It's strange how specialists gladly spend a great deal of time perfecting their skills to pursue a five percent raise, while at the same time there is a fatalistic tendency to accept whatever investment strategies are currently fashionable on Wall Street when it comes to generating passive income.30 When investments become fashionable (a result of emergent behavior of a system), by definition they no longer offer good returns, even though they have historically when only used by a few people. Handing over responsibility for one's savings does not make sense, especially for anyone whose investment income is comparable to one's expenses or worse, one's job income.31 Such a person is not just an employee, but an asset manager as well.
It would thus be possible to literally run small errands, like picking up small items from the supermarket, and anyone who does this on a regular basis is bound to end up with sustained low-intensity endurance and a resting pulse lower than 50 beats per minute. If you managed to arrange your residence to be less than three miles from anything, you wouldn't even need a bicycle. In that case, I would walk to work, which would take 60 minutes that could be used for meditation, brainstorming or calculating your passive income from your savings in as many ways as you can think of, and then run home, which would take about 20 minutes. When shopping, I'd run with an empty backpack and then walk a full backpack home. It is a more minimalist approach than the bicycle option. Cycling Statistically, cycling is about as dangerous as driving a standard-sized car--SUVs are a little bit more dangerous because of rollovers and the increased difficulty of swerving out of the way in a bigger vehicle.97 However, many bike riders are killed because they ride in the wrong direction or on the sidewalk.
3D printing, additive manufacturing, Affordable Care Act / Obamacare, AI winter, algorithmic trading, Amazon Mechanical Turk, artificial general intelligence, assortative mating, autonomous vehicles, banking crisis, basic income, Baxter: Rethink Robotics, Bernie Madoff, Bill Joy: nanobots, call centre, Capital in the Twenty-First Century by Thomas Piketty, Chris Urmson, Clayton Christensen, clean water, cloud computing, collateralized debt obligation, commoditize, computer age, creative destruction, debt deflation, deskilling, diversified portfolio, Erik Brynjolfsson, factory automation, financial innovation, Flash crash, Fractional reserve banking, Freestyle chess, full employment, Goldman Sachs: Vampire Squid, Gunnar Myrdal, High speed trading, income inequality, indoor plumbing, industrial robot, informal economy, iterative process, Jaron Lanier, job automation, John Markoff, John Maynard Keynes: technological unemployment, John von Neumann, Kenneth Arrow, Khan Academy, knowledge worker, labor-force participation, labour mobility, liquidity trap, low skilled workers, low-wage service sector, Lyft, manufacturing employment, Marc Andreessen, McJob, moral hazard, Narrative Science, Network effects, new economy, Nicholas Carr, Norbert Wiener, obamacare, optical character recognition, passive income, Paul Samuelson, performance metric, Peter Thiel, Plutocrats, plutocrats, post scarcity, precision agriculture, price mechanism, Ray Kurzweil, rent control, rent-seeking, reshoring, RFID, Richard Feynman, Richard Feynman, Rodney Brooks, secular stagnation, self-driving car, Silicon Valley, Silicon Valley startup, single-payer health, software is eating the world, sovereign wealth fund, speech recognition, Spread Networks laid a new fibre optics cable between New York and Chicago, stealth mode startup, stem cell, Stephen Hawking, Steve Jobs, Steven Levy, Steven Pinker, strong AI, Stuxnet, technological singularity, telepresence, telepresence robot, The Bell Curve by Richard Herrnstein and Charles Murray, The Coming Technological Singularity, The Future of Employment, Thomas L Friedman, too big to fail, Tyler Cowen: Great Stagnation, union organizing, Vernor Vinge, very high income, Watson beat the top human players on Jeopardy!, women in the workforce
As a result, virtually no one who gets into the program ever works again. Clearly, if a guaranteed income is means-tested, then this should happen at a relatively high level, preferably well into middle-class territory. A person who decides to forego other earning opportunities then faces a long fall. Another good idea would be to discriminate between active and passive income. A guaranteed income might be means-tested aggressively against passive income such as a pension, investment income, or Social Security. Active income like wages from a job, self-employment income, or earnings from a small business either would not be means-tested at all or would occur at a much higher level. This should ensure a consistent incentive for everyone to work as hard as possible, given the opportunities available. A guaranteed income scheme would also be likely to create a number of more subtle incentives for both individuals and families.
The Automatic Customer: Creating a Subscription Business in Any Industry by John Warrillow
Airbnb, airport security, Amazon Web Services, asset allocation, barriers to entry, call centre, cloud computing, commoditize, David Heinemeier Hansson, discounted cash flows, high net worth, Jeff Bezos, Network effects, passive income, rolodex, sharing economy, side project, Silicon Valley, Silicon Valley startup, software as a service, statistical model, Steve Jobs, Stewart Brand, subscription business, telemarketer, time value of money, zero-sum game, Zipcar
We’ll discuss why automatic customers buy more than one-shot customers and why subscription revenue is stickier than a one-time purchase. Part Two is divided into minichapters on the nine subscription business models. As you’ll see, you have a variety of choices when it comes to building a recurring revenue stream for your business. Whether you want to transform your entire business or just pick up a few thousand dollars of passive income, you’ll get a ton of new ideas for applying the subscription model to your company. The third and final section of The Automatic Customer gives you the blueprint for building your subscription business. We’ll discuss a handful of key statistics that will define the viability of your subscription and highlight one ratio you must achieve in order to scale up. We’ll look at the psychology of selling your subscription and how to overcome something I call “subscription fatigue.”
The End of Jobs: Money, Meaning and Freedom Without the 9-To-5 by Taylor Pearson
Airbnb, barriers to entry, Black Swan, call centre, cloud computing, commoditize, creative destruction, David Heinemeier Hansson, Elon Musk, en.wikipedia.org, Frederick Winslow Taylor, future of work, Google Hangouts, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, loss aversion, low skilled workers, Lyft, Marc Andreessen, Mark Zuckerberg, market fragmentation, means of production, Oculus Rift, passive income, passive investing, Peter Thiel, remote working, Ronald Reagan: Tear down this wall, sharing economy, side project, Silicon Valley, Skype, software as a service, software is eating the world, Startup school, Steve Jobs, Steve Wozniak, Stewart Brand, telemarketer, Thomas Malthus, Uber and Lyft, unpaid internship, Watson beat the top human players on Jeopardy!, web application, Whole Earth Catalog
While there’s a tremendous amount to learn from individuals like Buffett and Munger, it’s worth considering their perspective. Compound interest on “float” (the money currently in their insurance businesses from paid premiums until claims are paid it out) is powerful for them because they are compounding billions of dollars. If you have $10 million and lend it out at a 5% interest rate then you’d be getting $41,666 in passive income every month. That’s without ever touching the principal $10 million sitting in the bank. Not bad. If you build a company and sell it for a few million dollars, then compound interest is powerful. While the math and logic behind the Fast Lane vs. Slow Lane has always been true, the internet and economic changes we’ve discussed have made the entrepreneurial path more accessible and the potential gains larger.
asset allocation, Bernie Madoff, compound rate of return, diversification, financial independence, full employment, German hyperinflation, index fund, money market fund, nuclear winter, passive income, payday loans, risk tolerance, Vanguard fund, yield curve
Sometime in the next few years we will have two nice new income streams coming online in the form of Social Security. Most importantly, I know I’m well under the 6-7% level that requires close attention. Given the above, going forward my guess is it will drop to under 4%. Within that 3-7% range, the key to choosing your own rate has less to do with the numbers than with your personal flexibility. If as needed you can readily adjust your living expenses, find work to supplement your passive income and/or are willing and able to comfortably relocate to less expensive places, you will have a far more secure retirement no matter what rate you choose. Happier too I’d guess. If you are locked into certain income needs, unwilling or unable to ever work again and your roots go too deep to ever seek out greener pastures, you’ll need to be much more careful. Personally, I’d work on adjusting those attitudes.
Freedom Without Borders by Hoyt L. Barber
accounting loophole / creative accounting, Affordable Care Act / Obamacare, Albert Einstein, banking crisis, diversification, El Camino Real, estate planning, fiat currency, financial independence, fixed income, high net worth, illegal immigration, interest rate swap, money market fund, obamacare, offshore financial centre, passive income, quantitative easing, reserve currency, road to serfdom, selective serotonin reuptake inhibitor (SSRI), too big to fail
Expat Haven, Tax, and Incentives Guide 111 Embassy: Brazilian Embassy, 3006 Massachusetts Avenue, N.W., Washington, D.C. Telephone (202) 238-2700. Website: www.brasilemb.org. Costa Rica Tourist Stay: Visa required for stays up to 90 days. Passport/Residency: Two types of residency programs: (1) Retired persons who bring in more than US $600 a month from an established retirement plan for at least five years; (2) a person with a guaranteed passive income from a recognized source of at least US $1,000 a month for the same period. These sums must be converted into the local currency at the official exchange rate. Dual citizenship is acceptable. The new resident is required to at least spend four months of the year in the country. Taxes: Foreign-source income is tax exempt, but if you earn income within Costa Rica, you will be subject to its income tax law and taxed on income and profits accordingly.
The New Elite: Inside the Minds of the Truly Wealthy by Dr. Jim Taylor
British Empire, call centre, dark matter, Donald Trump, estate planning, full employment, glass ceiling, income inequality, Jeff Bezos, Louis Pasteur, Maui Hawaii, McMansion, means of production, passive income, performance metric, Plutocrats, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, Ronald Reagan, stealth mode startup, Steve Jobs, Thorstein Veblen, trickle-down economics, women in the workforce, zero-sum game
Less well known, but with almost an equal impact, have been changes in the ﬁnancial markets and government regulation. Set aside your political preconceptions: Much of it started with the ‘‘Reagan Revolution.’’ On August 23, 1981, the Reagan administra- The Wealth of the Nation 37 tion changed the American tax code in a way that fostered capital markets. Essentially, the top tax rate for unearned income (passive income from investments) was reduced from a little over 70 percent to either the top tax rate for earned income if the investor is a ‘‘partner’’ in a company, or to the top tax rate for capital gains if the investor is ‘‘passive’’—that is, plays no management role in a company. These changes, seemingly obscure, shifted the risks of investing. Losses were now completely deductible and could be carried forward to a more advantageous tax year.
Airbnb, Alexander Shulgin, artificial general intelligence, asset allocation, Atul Gawande, augmented reality, back-to-the-land, Bernie Madoff, Bertrand Russell: In Praise of Idleness, Black Swan, blue-collar work, Buckminster Fuller, business process, Cal Newport, call centre, Checklist Manifesto, cognitive bias, cognitive dissonance, Colonization of Mars, Columbine, commoditize, correlation does not imply causation, David Brooks, David Graeber, diversification, diversified portfolio, Donald Trump, effective altruism, Elon Musk, fault tolerance, fear of failure, Firefox, follow your passion, future of work, Google X / Alphabet X, Howard Zinn, Hugh Fearnley-Whittingstall, Jeff Bezos, job satisfaction, Johann Wolfgang von Goethe, John Markoff, Kevin Kelly, Kickstarter, Lao Tzu, life extension, lifelogging, Mahatma Gandhi, Marc Andreessen, Mark Zuckerberg, Mason jar, Menlo Park, Mikhail Gorbachev, Nicholas Carr, optical character recognition, PageRank, passive income, pattern recognition, Paul Graham, peer-to-peer, Peter H. Diamandis: Planetary Resources, Peter Singer: altruism, Peter Thiel, phenotype, PIHKAL and TIHKAL, post scarcity, premature optimization, QWERTY keyboard, Ralph Waldo Emerson, Ray Kurzweil, recommendation engine, rent-seeking, Richard Feynman, Richard Feynman, risk tolerance, Ronald Reagan, selection bias, sharing economy, side project, Silicon Valley, skunkworks, Skype, Snapchat, social graph, software as a service, software is eating the world, stem cell, Stephen Hawking, Steve Jobs, Stewart Brand, superintelligent machines, Tesla Model S, The Wisdom of Crowds, Thomas L Friedman, Wall-E, Washington Consensus, Whole Earth Catalog, Y Combinator, zero-sum game
.* Took my daily caffeine intake (read: self-medication) so high that my “resting” pulse was 120+ beats per minute. 8 to 10 cups of coffee per day at minimum. Wore the same pair of jeans for a week straight just to have a much-needed constant during weeks of chaos. Seems pretty dysfunctional, right? But, in the last 8 weeks of that same period, I also: Increased my passive income 20%+. Bought my dream house. Meditated twice per day for 20 minutes per session, without fail. That marked the first time I’d been able to meditate consistently. Ended up cutting my caffeine intake to next-to-nothing (in the last 4 weeks): usually pu-erh tea in the morning and green tea in the afternoon. With the help of my blog readers, raised $100,000+ for charity: water for my birthday.
I’d be remiss to leave out the kind folks who spent many hours educating me on the details, tech, and craft of podcasting in the beginning. Many thanks, gentlemen! Listed in alphabetical order by first name (and if I forgot anyone, please let me know): Jason DeFillippo of Grumpy Old Geeks John Lee Dumas of Entrepreneur on Fire Jordan Harbinger of The Art of Charm Lewis Howes of The School of Greatness Matt Lieber and Alex Blumberg of Gimlet Media Pat Flynn of Smart Passive Income and Rob Walch of Libsyn Last but not least, this book is dedicated to my parents, who have guided, encouraged, loved, and consoled me through it all. I love you more than words can express. About the Author TIM FERRISS is one of Fast Company’s “Most Innovative Business People” and one of Forbes’s “Names You Need to Know.” He is an early-stage tech investor/advisor (Uber, Facebook, Alibaba, and more) and the author of three #1 New York Times and Wall Street Journal betsellers: The 4-Hour Workweek, The 4-Hour Body, and The 4-Hour Chef.
All About Asset Allocation, Second Edition by Richard Ferri
activist fund / activist shareholder / activist investor, asset allocation, asset-backed security, barriers to entry, Bernie Madoff, capital controls, commoditize, commodity trading advisor, correlation coefficient, Daniel Kahneman / Amos Tversky, diversification, diversified portfolio, equity premium, estate planning, financial independence, fixed income, full employment, high net worth, Home mortgage interest deduction, implied volatility, index fund, intangible asset, Long Term Capital Management, Mason jar, money market fund, mortgage tax deduction, passive income, pattern recognition, random walk, Richard Thaler, risk tolerance, risk-adjusted returns, risk/return, Robert Shiller, Robert Shiller, selection bias, Sharpe ratio, survivorship bias, too big to fail, transaction costs, Vanguard fund, yield curve
The couple’s 50-year commingled allocation age is quite different from their chronological age; however, it may be more appropriate for their situation. Another example: assume the case of two 55-year-old female investors. How do we differentiate the special needs of each person? The questions to ask cover a wide range of issues, such as income needs, retirement needs, pensions, current and forecasted living expenses, bequeathing goals, passive income sources, the degree of detachment (i.e., risk tolerance), and so on. These real-life variables will dramatically affect each woman’s asset allocation. The chronological age-based allocation of 55 percent in bonds may be a good starting point or baseline allocation model. There are a number of life variables that will ultimately determine the allocation age of the investor. Assume that one of the 55-year-old women is barely getting by financially and that the other is doing very well.
The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich by Timothy Ferriss
Albert Einstein, Amazon Mechanical Turk, call centre, clean water, Donald Trump, en.wikipedia.org, Firefox, fixed income, follow your passion, game design, global village, Iridium satellite, knowledge worker, late fees, Maui Hawaii, oil shock, paper trading, Parkinson's law, passive income, peer-to-peer, pre–internet, Ralph Waldo Emerson, remote working, Richard Feynman, risk tolerance, Ronald Reagan, side project, Silicon Valley, Silicon Valley startup, Skype, Steve Jobs, Vilfredo Pareto, wage slave, William of Occam
-midnight in a campsite with no other distractions, (c) outsourcing everything that I would find difficult or time consuming (like the tricky programming stuff and the illustrations for my book). After about four weeks I had an automated informational website that had replaced ½ of my full-time income—requiring > four hours per week to maintain. The original plan was to arrive in Adelaide and get a J.O.B. But with my passive income, I decided to simply grow my new business and am currently very close to replacing 100% of my previous income. It feels f&*#ing brilliant. Now we plan to travel the world slowly until the kids are ready for primary school… Who says kids hold you back?! —FINN WORKING REMOTELY One month and one year ago, I read 4HWW on the recommendation of my sister’s boyfriend after I had been talking for months about changing my life drastically and moving to Argentina to learn Castellano.
The Age of Stagnation by Satyajit Das
9 dash line, accounting loophole / creative accounting, additive manufacturing, Airbnb, Albert Einstein, Alfred Russel Wallace, Anton Chekhov, Asian financial crisis, banking crisis, Berlin Wall, bitcoin, Bretton Woods, BRICs, British Empire, business process, business process outsourcing, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Clayton Christensen, cloud computing, collaborative economy, colonial exploitation, computer age, creative destruction, cryptocurrency, currency manipulation / currency intervention, David Ricardo: comparative advantage, declining real wages, Deng Xiaoping, deskilling, disintermediation, Downton Abbey, Emanuel Derman, energy security, energy transition, eurozone crisis, financial innovation, financial repression, forward guidance, Francis Fukuyama: the end of history, full employment, gig economy, Gini coefficient, global reserve currency, global supply chain, Goldman Sachs: Vampire Squid, happiness index / gross national happiness, Honoré de Balzac, hydraulic fracturing, Hyman Minsky, illegal immigration, income inequality, income per capita, indoor plumbing, informal economy, Innovator's Dilemma, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, John Maynard Keynes: technological unemployment, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, labour mobility, light touch regulation, liquidity trap, Long Term Capital Management, low skilled workers, Lyft, Mahatma Gandhi, margin call, market design, Marshall McLuhan, Martin Wolf, Mikhail Gorbachev, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, oil shale / tar sands, oil shock, old age dependency ratio, open economy, passive income, peak oil, peer-to-peer lending, pension reform, Plutocrats, plutocrats, Ponzi scheme, Potemkin village, precariat, price stability, profit maximization, pushing on a string, quantitative easing, race to the bottom, Ralph Nader, Rana Plaza, rent control, rent-seeking, reserve currency, ride hailing / ride sharing, rising living standards, risk/return, Robert Gordon, Ronald Reagan, Satyajit Das, savings glut, secular stagnation, seigniorage, sharing economy, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, sovereign wealth fund, TaskRabbit, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the market place, the payments system, The Spirit Level, Thorstein Veblen, Tim Cook: Apple, too big to fail, total factor productivity, trade route, transaction costs, unpaid internship, Unsafe at Any Speed, Upton Sinclair, Washington Consensus, We are the 99%, WikiLeaks, Y2K, Yom Kippur War, zero-coupon bond, zero-sum game
In 2012, among developed economies, the US had the highest share of relatively low-paying jobs, primarily in leisure, healthcare, and hospitality. Over recent decades, these forces, combined with the decline in unionization and the power of organized labor, increased income inequality. The concentrated ownership of property, financial assets, and investments is linked to inequality. The share of passive income, such as interest, dividends, rents, and profits, while volatile, has increased over time, relative to income from labor. In 2010, the wealthiest 10 percent of US households owned 70 percent of all wealth, while the top 1 percent owned 35 percent. The bottom 50 percent of households owned 5 percent. The richest eighty-five people in the world, which includes Bill Gates, Warren Buffett, Carlos Slim, and Jack Ma, are wealthier than the poorest 3.5 billion people on the planet.
Financial Independence by John J. Vento
Affordable Care Act / Obamacare, Albert Einstein, asset allocation, diversification, diversified portfolio, estate planning, financial independence, fixed income, high net worth, Home mortgage interest deduction, money market fund, mortgage debt, mortgage tax deduction, oil shock, Own Your Own Home, passive income, risk tolerance, the rule of 72, time value of money, transaction costs, young professional, zero day
bapp03.indd 331 26/02/13 3:06 PM 332 Appendix C Gross Income Gross income is all the income you receive during the year from whatever source. Personal gross income falls into three general categories: 1. Active income: Wages, salaries, bonuses, tips, commissions, as well as certain other forms of income including pension income and alimony. 2. Portfolio income: Interest, dividends and profits generated from most types of investment holdings, including savings accounts, stocks, bonds, mutual funds, options, and futures. 3. Passive income: Income derived from real estate, limited partnerships, and other tax shelters. Certain income may be tax exempt, including: • • • • • • Child-support payments Compensations from accident, health, and life insurance Gifts and inheritances Municipal bond interest Scholarships and fellowships Veterans benefits In addition, the amount of deductions and write-offs that taxpayers can take in certain categories are subject to a number of rules, regulations, and limitations.
Your Money or Your Life: 9 Steps to Transforming Your Relationship With Money and Achieving Financial Independence: Revised and Updated for the 21st Century by Vicki Robin, Joe Dominguez, Monique Tilford
asset allocation, Buckminster Fuller, buy low sell high, credit crunch, disintermediation, diversification, diversified portfolio, fiat currency, financial independence, fixed income, fudge factor, full employment, Gordon Gekko, high net worth, index card, index fund, job satisfaction, Menlo Park, money market fund, Parkinson's law, passive income, passive investing, profit motive, Ralph Waldo Emerson, Richard Bolles, risk tolerance, Ronald Reagan, Silicon Valley, software patent, strikebreaker, Thorstein Veblen, Vanguard fund, zero-coupon bond
Steve S. did his own version of this by purchasing a self-storage facility and having on-site and off-site managers run the project on a daily basis. Yes, of course, this is in part profiting from consumer excess—having more stuff than house to put it in. Whatever the irony, Steve and his family collect enough per month that he’s been able to live AND save enough to buy a second facility. Heʹs chosen a life of community service, occupying roles of significant responsibility, but he is able to be bold in his service because he has that passive income that actively supports his life. Quentin N. and his wife Irene have a real-estate story with some real ups and downs. They bought a four-plex twenty years ago, living in one unit and renting the other three. Even when they moved to a nearby city, they kept the four-plex as an income property. All well and good until the neighborhood around them deteriorated and their building deteriorated as well.